Question

Fit-for-Life Foods reports the following income statement accounts for the year ended December 31. Gain on sale of equipment $ 6,250 Depreciation expense—Office copier $ 420 Office supplies expense 790 Sales discounts 15,200 Insurance expense 1,240 Sales returns and allowances 3,900 Sales 225,000 TV advertising expense 3,000 Office salaries expense 32,100 Interest revenue 660 Rent expense—Selling space 10,500 Cost of goods sold 88,800 Sales staff wages 22,400 Sales commission expense 13,600 Prepare a multiple-step income statement.

Answer 1

Answer: Multi Step Income Statement

As for the information provided,

Sales = $225,000

Less: Sales Discounts = ($15,200)

Less: sales Returns And Allowances = ($3,900)

Net Sales = $205,900

Cost of goods sold = ($88,800)

Gross Profits = $117,100

Expenses:

Selling expenses:

Rent Expense = $10,500

Sales staff wages = $22,400

Sales commission = $13,600

TV advertising expense = $3,000

Total Selling expense = ($49,500)

General And Administrative Expense

Office Supplies = $790

Insurance = $1,240

Depreciation expense Office copier = $420

Office salaries expense = $32,100

Total General Administrative Expense = ($34,550)

Total Expenses = ($84,050)

Operating Income = $33,050

Other Revenues Gains & Losses

Interest revenue = $660

Gain on sale of equipment = $6,250

Total Other Revenues = $6,910

Net Income = $39,960